Two Story Additions As Investments
Wednesday, November 30, -0001.
A two-story addition is a sizeable investment and one of the costliest improvements you can make to your house, especially if it includes another bathroom or enlarged kitchen — rooms that have a high per-square-foot cost.
According to the annual Cost vs. Value Report from Remodeling Magazine, the national average cost of a 16x24-foot, two-story addition is $165,796 and includes a full bedroom and bath over a first-floor family room.
Although you can expect to recoup about $103,400 of that investment—around 62%—when you sell your home, you should carefully evaluate whether the expense is worth the effort. If you’ll be pricing yourself out of the general value of your neighborhood, you might be better off moving to a different area and into a house that already has the size and amenities you’re thinking of adding.
If you’re looking to recoup a majority of your investment through resale of the home, or to improve your prospects of selling, do your homework carefully, says REALTOR® and professional appraiser Melanie J. McLane of Jersey Shore, Pa. A good rule of thumb is that to realize maximum payback on your investment, you should only undertake a major remodeling project if you plan to stay in your home at least five years. However, each situation depends on the local market, adds McLane.
In the San Diego, for example, where high labor costs are accompanied by high real estate prices, the average investment for a two-story addition is about $192,000 and the return is more than 70%, or about $135,000. In Cincinnati, a cost-to-build of about $173,500 is paired with a modest return on investment of just 56%, or about $97,200.
National average cost, 16x24-foot, two-story addition, with bath:
Job Cost: $165,796
Resale Value: $103,391
Cost Recoup: 62.4%
Regional info:
